Correction to This Article
Earlier versions of this story incorrectly said that the proposal being considered by Congress to expand the State Children's Health Insurance Program would provide Medicaid coverage to uninsured children in low-income working families. That proposal is not a Medicaid program. This version has been corrected.

Eyes on California as Lawmakers Pursue a Health-Care Deal

Gov. Arnold Schwarzenegger (R) poses with Alice Loh after an AARP rally in Sacramento where he reaffirmed his pledge of universal health care in the state.
Gov. Arnold Schwarzenegger (R) poses with Alice Loh after an AARP rally in Sacramento where he reaffirmed his pledge of universal health care in the state. (AP)
By Christopher Lee
Washington Post Staff Writer
Monday, August 27, 2007; 1:12 PM

California did not start the current wave of efforts to overhaul the American health-care system, but what happens in Sacramento over the next few weeks could have a big impact on whether the drive gains momentum or peters out.

With three weeks remaining in the state's legislative session, Gov. Arnold Schwarzenegger (R) still has nothing to show for the grand proposal he made in January to create a system that would guarantee health insurance for all Californians. But with the resolution of a nearly two-month-long state budget impasse last week, the focus is turning back to health care, with hard-to-predict results.

The adoption of a comprehensive plan to overhaul health care in a big, politically influential state probably would spur similar efforts around the country and increase pressure on presidential candidates to tackle the issue. It could also have an impact in Congress, where a battle will resume next month over whether to expand the State Children's Health Insurance Program, which provides coverage for uninsured children in low-income working families.

Smaller states took the first steps. Massachusetts last year passed a law requiring all citizens to buy health insurance, and in recent years Vermont and Maine approved legislation intended to dramatically expand coverage to the uninsured, and Illinois made a priority of covering more kids. In 1974, Hawaii became the first (and still only) state to require that employers provide health insurance to their workers.

Other states considering major proposals include Pennsylvania and Wisconsin, while New Mexico, Colorado, Alaska and Minnesota are in the fact-gathering stage, said Laura Tobler, a health-policy expert at the National Conference of State Legislatures.

"It is a priority in probably two dozen states," Tobler said. "Historically, health reform seems to cycle. There was a big upsurge in interest in the early to mid-'90s, and we're seeing even more interest now. I think it's going to be on the hot list for the next year or two. States have led the way."

"If a breakthrough could occur in California, it would really be an earthquake in terms of health reform," said Drew Altman, president of the Henry J. Kaiser Family Foundation, a nonpartisan group that researches health-care issues. "A lot turns on whether it succeeds or fails. . . . Candidates will look at that when they decide how hard to push this. The Congress in 2009 will look at it. It will affect the whole psychology of the health reform movement that's building."

Schwarzenegger's plan -- which would require everyone to have insurance; would impose new fees on employers, doctors and hospitals; and would subsidize coverage for those who couldn't afford it -- has not made it into legislation. Instead, the Democrats who control the legislature fashioned their own bill. It differs in important ways from the governor's plan and probably has enough support to pass -- but the governor said last week that he would veto it.

With the clock running out, the governor and top California Democrats, including Senate President Pro Tem Don Perata and Assembly Speaker Fabian N??ez, are under pressure to reach a compromise, even as many Republican lawmakers and business groups remain opposed and predict legal challenges to whatever emerges.

"The time for action has come," Schwarzenegger told about 1,000 AARP members who rallied at the State Capitol in Sacramento last week. "I can guarantee you that we are going to get this done. We are going to create the health-care system that will bring down the costs and make sure that everyone in this state is insured."

N??ez said in an interview Friday that it would help if Schwarzenegger showed a little flexibility. The speaker plans to seek a vote this week on a new bill embodying the governor's proposal to show Schwarzenegger that it lacks majority support.

"He's got to get off his plan because it's pie in the sky right now," N??ez said.

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